Wednesday, September 7, 2011

Oracle President Safra Catz ready to talk settlement with Google in court -- Google wants to send Andy Rubin

Shortly before the holiday weekened, Judge William Alsup, the federal judge presiding over Oracle's patent and copyright infringement lawsuit against Google, communicated his inclination to order "the top executive officers" of Oracle and Google to participate in a mediation effort, spending one or two full days in court before a Magistrate Judge.

The court can't force them to settle on any particular terms, but the court may have the authority to require them to make an effort.

The deadline for the parties' responses it today at 12 noon local time. Oracle's reply came in more than a half-hour before the deadline, and I updated this post after Google's reply became available.

Here's Oracle's position:

Oracle concurs with the Court’s view that an additional attempt at settlement of the case through mediation before a United State Magistrate Judge is warranted. Oracle has found previous efforts at settlement, including private discussions between the parties, frustrating for lack of follow-through, and believes that those efforts have not exhausted the possibilities for resolving the case.

As suggested by the Court, Oracle considers it essential that both parties bring top-level executives. Accordingly, Oracle’s executive representatives in the mediation before the Magistrate Judge will be Safra Catz, President of Oracle Corporation, and Thomas Kurian, Executive Vice President of Oracle Product Development.

Oracle will strive to make its representatives available as necessary and proposes that the mediation occur before the end of September.

This is a smart move by Oracle. It's constructive and the judge will like it. It's obvious that Oracle isn't afraid of a trial but would rather get Google to pay before. A trial always comes with some degree of uncertainty even though Oracle's case appears pretty strong. Also, there's no certainty right now as to the exact timing of the trial. After all, Oracle can always say no if Google doesn't offer enough.

In my post on Judge Alsup's note, I already said that Oracle wasn't likely to send CEO Larry Ellison (though he would probably be a tremendous negotiator) but would probably send one of the two presidents of the company, and I mentioned Safra Catz.

I expected that Google was also going to respond constructively. In late July, Google blinked and for the first time -- after previously dismissing this lawsuit in its entirety -- indicated a willingness to settle. And looking at the latest revelations, such as a Google engineer's admission of "likely" having copied Java code into Android, Google would probably be well-advised to accede to Oracle's demands.

This is Google's answer to the court:

Google welcomes the Court's suggestion that the parties participate in a mediation of this case before a Magistrate Judge. Google does not object to participating in a mediation before a Magistrate Judge who is not otherwise involved in this case.

Google recognizes the importance of having top executives of the parties attend the Court-ordered mediation. Google proposes that Andrew Rubin, who is Senior Vice President, Mobile and reports directly to the Chief Executive Officer, attend for Google together with Kent Walker, Vice President and General Counsel of Google. Mr. Rubin's executive responsibilities include all of Google’s mobile business, of which the Android business is a part. Mr. Rubin is knowledgeable regarding the issues in this case and he is fully empowered to resolve this matter on reasonable terms.

Google also understands from counsel for Oracle that they propose that Safra Catz and Thomas Kurian attend on behalf of Oracle -- and Google agrees with this choice. Ms. Catz is one of two Presidents of Oracle who, like Mr. Rubin, reports directly to Oracle's Chief Executive Officer. Mr. Rubin and Ms. Catz were involved in previous discussions involving the subject matter at issue in this case.

Some comments on this one -- I believe it shows Google isn't prepared to spend serious money on a settlement at this stage.

Google's concern about a Magistrate Judge who might be involved with this case must relate to Magistrate Judge Donna Ryu, who (to the extent I can tell as an observer) appears to do a great job on discovery disputes in connection with this case. But she ruled against Google on the important, incriminating Lindholm email. Apart from that experience, Google may just generally be uneasy with a mediator who knows too much about the case because with a certain level of knowledge, one can hardly reach any other conclusion than "willful infringement".

The choice of Andy Rubin and Google's General Counsel Kent Walker is very questionable. While Google can't be penalized for the fact that it doesn't give anyone the title of "President", those two executives are clearly not at a level with Safra Catz.

The current version of Google's list of "Executive Officers" on the Management page of its website does not include Rubin, nor Walker. By the time I write this, the six persons listed there are Page, Schmidt, Brin, Arora, Drummond, and Pichette. Rubin may report directly to Page, but he's apparently not among the top six executives. And Walker is not even the top lawyer: that would be David Drummond.

I'm sure Judge Alsup will figure this out and draw his conclusions. Maybe he'll even take a decision that the proposed negotiators are not at the level at which they should be from his point of view.

[Update] Oracle complained about these appointments and raised points similar to the ones I made. I wrote a follow-up post on Oracle's request that the Court require Google to appoint someone more senior than Rubin, and on Oracle blaming Rubin for the mess. [/Update]

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